Unit 1: Real Estate as a Career

Which of the following statements is true regarding a real estate agent's income? a. Agents who work hard and smart can earn an excellent living b. Agents must work hard, but not necessarily smart c. A commission is based on the property's size d. Income is not a direct result of one's own efforts

a. Agents who work hard and smart can earn an excellent living Hint: Instead of salaries, real estate agents earn a commission, which is a fee charged by the brokerage based on a percentage of the property's sales price. The advantage is that you can earn an excellent living if you work hard and work smart. Income directly reflects your efforts, with no limits on what astute, hard-working men and women can earn.

What do most new real estate licensees do after passing the state exam and receiving the state license? a. Proceed with a training program b. Become a real estate attorney c. Open their own real estate firm d. Begin investing in real estate

a. Proceed with a training program Hint: Often, new real estate licensees wonder what they will be doing all day. Initially, most new licensees go through a training program. After passing the state exam and getting your license, you will probably enter one of the new license training programs offered by larger real estate firms.

Which of the following is not one of the six separate areas of a licensee's activities? a. Representing clients in real estate law cases b. Attending meetings c. Previewing properties and matching prospective buyers with properties d. Prospecting for listings

a. Representing clients in real estate law cases Hint: A licensee's activities are varied and can be divided into six separate areas: prospect for listings, preview properties, match prospective buyers with properties, write up purchase offers, handle the paperwork and close escrow, and attend meetings.

Why was a real estate career attractive to homemakers and retirees in the past? a. The flexibility and part-time work schedules b. The inflexible work schedules c. It required long work hours and extensive overtime d. The full-time work schedules

a. The flexibility and part-time work schedules Hint: In the past, many homemakers and retired people were attracted to real estate sales because of the flexible and part-time work schedules that are characteristic of this field.

What occurs during the activity of pre-qualifying? a. The licensee works with a lender to determine what a buyer can afford b. The licensee closes escrow c. The licensee works with a seller to determine a listing price d. The licensee holds an open house

a. The licensee works with a lender to determine what a buyer can afford Hint: In this pre-qualifying phase, the licensee will meet with potential buyers to define the type of home in which the buyer is interested. In addition, the licensee, working with a lender, tries to determine how much the buyer(s) can afford to spend.

Which of the following is true regarding paperwork? a. There is less paperwork in the beginning of the licensee's career b. A licensee does not handle paperwork c. There is more paperwork in the beginning of the licensee's career d. Less paperwork is involved as the licensee's career progresses

a. There is less paperwork in the beginning of the licensee's career Hint: Brokers handle the paperwork necessary to close the transaction. In the beginning of your career, you will have very little paperwork to complete. You will most likely schedule time to prepare marketing materials and consider that as part of your administrative duties. However, as you become more involved on the job, you will need to schedule time to follow-up on outstanding requirements from each of your transactions.

The advantage of choosing a small independent firm is the: a. amount of flexibility for a new salesperson. b. increased brand recognition. c. lack of training available. d. large amount of office locations.

a. amount of flexibility for a new salesperson. Hint: Many newly licensed salespeople choose to work in a small independent firm. Small independent firms usually have one or two office locations and offer the greatest amount of flexibility for a new broker.

A licensee who is interested in retail stores and shopping centers should look into entering: a. commercial real estate. c. real estate counseling. d. real estate appraisal. e. residential real estate.

a. commercial real estate. Hint: Licensees interested in income-producing properties such as apartments, office buildings, retail stores, and shopping centers should consider a career in commercial brokerage.

While a career in real estate offers the ability to be your own boss, success is dependent on: a. learning to be a self-starter. b. understanding that ambition is not necessary. c. learning that goals are not important. d. someone else making decisions for you.

a. learning to be a self-starter. Hint: Learning to be a self-starter in real estate is especially important for those who have spent most of their lives working in an environment where someone else made the decisions and told them what to do. Since you are your own boss, you must decide how to get results. Successful people in real estate are goal-oriented, persevering, self-motivated, ambitious, and people-oriented.

The majority of new licensees begin their careers with a: a. mentor. b. public relations specialist. c. personal assistant. d. attorney.

a. mentor. Hint: Many new licensees begin their real estate careers by starting out as a trainee with a mentor to guide them through their first few transactions as brokers. A mentor is a person providing quality support, advice, and counseling.

Earning potential for real estate licensees is: a. not based on an established pay scale. b. only salary-based. c. only hourly-based. d. based on your employer's pay scale.

a. not based on an established pay scale. Hint: Real estate agents have the potential for high earnings. Your earning potential as a real estate licensee is in your own hands and is not based on a pay scale established by your employer.

The main goal of property management is to: a. protect the owner's investment to produce and maintain a profit. b. manage an individual's finances. c. assign a dollar value to real property. d. assist with licensing an individual.

a. protect the owner's investment to produce and maintain a profit. Hint: The main goal of property management is to protect the owner's investment in order to produce the highest possible financial return over the longest period of time.

Which of the following is something to look for when selecting a brokerage? a. Unfair commission split b. Availability of training c. Unsteady history d. No reputation

b. Availability of training Hint: Training is something else to look for when selecting a brokerage. A new broker may get good, indifferent, or no training, depending on the company.

Who determines the value for properties? a. Prospecting coordinators b. Real estate appraisers c. Advertising coordinators d. Transaction coordinators

b. Real estate appraisers Hint: Real estate appraisers determine the value of properties. Real estate is appraised to determine many types of value—assessed value for tax purposes, value for a potential investor, book value for accounting purposes, rental value for income projections, and insurable value.

Who determines the value for properties? a. Transaction coordinators b. Real estate appraisers c. Prospecting coordinators d. Advertising coordinators

b. Real estate appraisers Hint: Real estate appraisers determine the value of properties. Real estate is appraised to determine many types of value—assessed value for tax purposes, value for a potential investor, book value for accounting purposes, rental value for income projections, and insurable value.

What occurs during the activity of pre-qualifying? a. The licensee works with a seller to determine a listing price b. The licensee works with a lender to determine what a buyer can afford c. The licensee closes escrow d. The licensee holds an open house

b. The licensee works with a lender to determine what a buyer can afford Hint: In this pre-qualifying phase, the licensee will meet with potential buyers to define the type of home in which the buyer is interested. In addition, the licensee, working with a lender, tries to determine how much the buyer(s) can afford to spend.

Real estate licensees can work as independent contractors, meaning they are: a not allowed to choose the method to use when completing the work. b. accountable for the results of the work. c. not accountable for the results of the work. d. not under contract.

b. accountable for the results of the work. Hint: Real estate licensees act as independent contractors. An independent contractor is a person who chooses the method to use in completing the work under contract and is accountable for the results.

Real estate licensees can work as independent contractors, meaning they are: a. not under contract. b. accountable for the results of the work. c. not accountable for the results of the work. d. not allowed to choose the method to use when completing the work.

b. accountable for the results of the work. Hint: Real estate licensees act as independent contractors. An independent contractor is a person who chooses the method to use in completing the work under contract and is accountable for the results.

A licensee who is interested in retail stores and shopping centers should look into entering: a. residential real estate. b. commercial real estate. c. real estate counseling. d. real estate appraisal.

b. commercial real estate Hint: Licensees interested in income-producing properties such as apartments, office buildings, retail stores, and shopping centers should consider a career in commercial brokerage.

The main goal of property management is to: a. assign a dollar value to real property. b. protect the owner's investment to produce and maintain a profit. c. manage an individual's finances. d. assist with licensing an individual.

b. protect the owner's investment to produce and maintain a profit. Hint: The main goal of property management is to protect the owner's investment in order to produce the highest possible financial return over the longest period of time.

What is the primary function of real estate counselors? a. managing properties and producing a financial return b. providing advice regarding the real estate business c. to act as a prospecting coordinator d. giving advice about social issues affecting the community

b. providing advice regarding the real estate business Hint: Real estate counselors give advice about property. They are the experts others seek when they want answers to real estate questions. Counselors must know every phase of the real estate business because they use that knowledge in nearly every consultation.

Which of the following is true regarding paperwork? a. Less paperwork is involved as the licensee's career progresses b. A licensee does not handle paperwork c. There is less paperwork in the beginning of the licensee's career d. There is more paperwork in the beginning of the licensee's career

c. There is less paperwork in the beginning of the licensee's career Hint: Brokers handle the paperwork necessary to close the transaction. In the beginning of your career, you will have very little paperwork to complete. You will most likely schedule time to prepare marketing materials and consider that as part of your administrative duties. However, as you become more involved on the job, you will need to schedule time to follow-up on outstanding requirements from each of your transactions.

When considering a career in real estate, it is important to choose a brokerage with: a. the highest commission split regardless of reputation. b. the flashiest marketing methods. c. a steady history and positive reputation. d. the most advertising dollars to spend.

c. a steady history and positive reputation. Hint: When considering a career in real estate, it is important for you to choose the right real estate brokerage. A real estate brokerage relies heavily on its reputation. A brokerage with a steady history and positive reputation in the community will be able to offer you the resources to become successful and take your career in a positive direction.

The opportunity to operate under the name and guidance of a business organization in exchange for a fee is a: a. private independent firm. b. public independent firm. c. franchise. d. commission.

c. franchise. Hint: According to a recent National Association of REALTORS® Member Profile, almost half of all REALTORS® are affiliated with a national franchise. A franchise is a business organization (franchisor) that enters into a contract with other businesses (franchisees) for a fee in order to operate under the franchisor's name and guidance. Each franchisee is an independent brokerage that is affiliated via the franchise's network to other brokerages.

Large independent real estate firms are: a. usually operated like small independent firms. b. affiliated with a national franchise. c. usually owned by private parties or partnerships. d. usually owned by public shareholders.

c. usually owned by private parties or partnerships. Hint: Large independent firms do not have an affiliation with national franchises. Large independent firms are usually owned by private parties or partnerships and may have many offices in one area. These companies usually operate like franchised companies and offer management opportunities as well.

Why was a real estate career attractive to homemakers and retirees in the past? a. The full-time work schedules b. It required long work hours and extensive overtime c. The inflexible work schedules d. The flexibility and part-time work schedules

d. The flexibility and part-time work schedules Hint: In the past, many homemakers and retired people were attracted to real estate sales because of the flexible and part-time work schedules that are characteristic of this field.

Which of the following is not a reason for a licensee to attend brokerage meetings? a. To keep updated on the latest economic trends b. To be aware of the latest technology available c. To learn about helpful sales techniques d. To solicit their listings

d. To solicit their listings Hint: Depending on the brokerage you choose, you will need to schedule time for weekly or monthly meetings. Many brokerages hold weekly sales meetings to discuss such items as sales techniques, economic trends, and upcoming events. It is important to attend these meetings to learn the latest information about available products, technology, and economic trends.

The opportunity to operate under the name and guidance of a business organization in exchange for a fee is a: a. private independent firm. b. commission. c. public independent firm. d. franchise.

d. franchise. Hint: According to a recent National Association of REALTORS® Member Profile, almost half of all REALTORS® are affiliated with a national franchise. A franchise is a business organization (franchisor) that enters into a contract with other businesses (franchisees) for a fee in order to operate under the franchisor's name and guidance. Each franchisee is an independent brokerage that is affiliated via the franchise's network to other brokerages.

Earning potential for real estate licensees is: a. based on your employer's pay scale. b. only salary-based. c. only hourly-based. d. not based on an established pay scale.

d. not based on an established pay scale. Hint: Real estate agents have the potential for high earnings. Your earning potential as a real estate licensee is in your own hands and is not based on a pay scale established by your employer.

Large independent real estate firms are: a. affiliated with a national franchise. b. usually owned by public shareholders. c. usually operated like small independent firms. d. usually owned by private parties or partnerships.

d. usually owned by private parties or partnerships. Hint: Large independent firms do not have an affiliation with national franchises. Large independent firms are usually owned by private parties or partnerships and may have many offices in one area. These companies usually operate like franchised companies and offer management opportunities as well.